Identifier
Created
Classification
Origin
05DARESSALAAM234
2005-02-03 13:20:00
CONFIDENTIAL
Embassy Dar Es Salaam
Cable title:  

Up-Country Travels: Snapshots of Five Regions

Tags:  ECON EAID EINV PGOV TZ 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 04 DAR ES SALAAM 000234 

SIPDIS

DEPARTMENT FOR AF/E AND INR/AA

E.O. 12958: 2/02/15
TAGS: ECON EAID EINV PGOV TZ
SUBJECT: Up-Country Travels: Snapshots of Five Regions


Classified by Pol-Econ Chief Judy Buelow for reason
1.4(b)

REF: A) Dar es Salaam 146

C O N F I D E N T I A L SECTION 01 OF 04 DAR ES SALAAM 000234

SIPDIS

DEPARTMENT FOR AF/E AND INR/AA

E.O. 12958: 2/02/15
TAGS: ECON EAID EINV PGOV TZ
SUBJECT: Up-Country Travels: Snapshots of Five Regions


Classified by Pol-Econ Chief Judy Buelow for reason
1.4(b)

REF: A) Dar es Salaam 146


1. (SBU) Summary: From January 7-23, when Embassy Dar es
Salaam had the use of a Twin Otter airplane from Prescott
Aviation, mission personnel traveled to five of Tanzania's
26 regions: Mwanza, Shinyanga, Mtwara, Mbeya and Ruvuma.
These five regions form an arc through western and southern
Tanzania, which begins at Lake Victoria, then proceeds
along the shores of Lake Malawi and across the Mozambican
border. Our choice of itinerary was motivated partly by
our interest in seeing Tanzania's most remote areas while
we had a chance to do so. We also took the opportunity to
inaugurate Self Help and DOD Humanitarian Assistance
projects, and to meet with local government officials. A
picture emerges of a hinterland that is traditionally poor
and remote, but with great aspirations for economic
development. Most of these regions have significant
potential, but need major investment to realize that
potential. In many areas, the privatization of formerly
moribund parastatals provides an engine for employment and
growth: the Wakulima Tea Growers Cooperative in Mbeya is a
stand-out success story. In Mwanza, the door opened to
major new investments by the US agricultural company
Cargill, once the government finally resolved an investment
dispute with the company that dated to the socialist era.
Our "snapshots" from each region follow. End Summary.

--------------
Mwanza Region
--------------


2. (U) Mwanza Region in northern Tanzania hugs the southern
shores of Lake Victoria and includes the city of Mwanza,
Tanzania's second-largest city. Twenty million people,
nearly two-thirds of Tanzania's population, live in Mwanza
and its neighboring Lake regions, making Mwanza city an
important commercial hub. Mwanza Region is buffered from
the refugee population that has impacted neighboring
regions to the west. The Regional Commissioner told emboff
that Mwanza was a "sleeping giant" with great potential for
significant growth. The region does in fact have
significant resources, including fish, gold, cotton, cattle
and access to tourism sites. Recent infrastructure

developments, including several newly-improved roads and a
more reliable electricity grid, may set the stage for the
giant to wake up.


3. (U) Gold mining represents the region's largest foreign-
exchange earner, and recent discoveries ensure that the
mining industry will remain active for the foreseeable
future. Fish products make up the next largest export
industry, with processed fish being shipped to Europe (and
to the U.S. via Europe). Fish products from Mwanza are
also sold throughout Tanzania. Mwanza also has a rich
though undeveloped agricultural sector. Cotton is the
largest export crop, but Mwanza also produces cattle and
tropical fruits. The still undeveloped tourism industry in
Mwanza has significant potential; Mwanza is as close to
Serengeti National Park as the traditional tourist hub,
Arusha, and the city is set in a beautiful natural
environment. Today, however, only one hotel reaches
international standards, and there is no conference
facility in the city.


4. (SBU) Local authorities held an Investors Forum last
year, and have focused on attracting further investment in
the region, particularly in tourism. American businesses
have recently been active in Mwanza in at least three
sectors: Cargill Cotton was the largest purchaser of
Tanzanian cotton in 2004, and is looking to invest in
commercial farming and ginneries in the region; a local
investor recently signed a franchise agreement with US
hotel chain Hawthorn Suites and plans to build a full-
service hotel in Mwanza; and an American investment company
is involved in the purchase of two high-speed ferryboats
that will service Mwanza and other Lake Victoria
communities. The resolution of business disputes and US
embassy commercial advocacy have been a significant factor
in some of this new investment. Cargill's dispute with the
parastatal Cotton Marketing Board had dragged through
courts and mediation since 1992; as recently as 2002, a
Cargill executive told econoff the company would not
consider further investments in Tanzania. The government's
payment of half of the disputed amount late in 2004, with a
firm commitment to pay the remainder in 2005, has
apparently sweetened Cargill on Tanzania and Mwanza
investment.


5. (U) Outside of the urban center of Mwanza, the region
remains undeveloped. Emboff visited Ukerewe district,
comprised of 26 islands in Lake Victoria, to see two USG-
funded projects. Accessible only by ferry, the district is
among the most remote in Tanzania. The islands are not
connected to the country's electrical grid, and only a few
small streets are paved. Residents feel far removed from
the government in Dar es Salaam, and expressed dismay that
their elected leaders have taken too long to provide needed
infrastructure and services. Traditional beliefs,
including the practice of witchcraft, maintain a stronger
hold in these rural areas. Some of these practices have
contributed to the spread of HIV/AIDS in the area. (For
example, it is believed that when a married person's spouse
dies, he or she must engage in sex to be cleansed of the
marriage. The person to perform this "cleansing" is often
appointed to do so for an entire village or group of
villages.) Education and modernization have been slow to
influence such rural areas.

--------------
Shinyanga Region
--------------


6. (U) Shinyanga Region is just south of Mwanza and
comprises vast stretches of farming and livestock lands.
Cotton dominates the agricultural sector, as the land is
too dry for many other crops. A few gold mining sites and
one diamond mine are found in Shinyanga. Still, the
population relies largely on subsistence farming, and has
been hit hardest in Tanzania by the drought in recent
years. Roads are poor, and getting food aid to a dispersed
population has been problematic. Emboff commissioned four
water wells built with Self-Help Fund assistance, which
brought clean water much closer to a remote village and a
secondary school. Many villages in the region still lack
nearby, clean water sources.

7.(C) Shinyanga is the hometown of Prime Minister
Frederick Sumaye, who is campaigning vigorously to be the
ruling party's nominee for president. The Regional
Commissioner for Shinyanga told emboff he had spent the
last two days touring the region in preparation for the
Prime Minister's upcoming visit. The Regional Commission
was expected to "pave the way" for the Prime Minister's
campaign. Paving the way often includes giving cash
presents to important local leaders to ensure their
support. The Regional Commissioner, who is a CCM appointee
from outside Shinyanga, was keenly interested to ensure the
visit went well.


8. (U) Economic prospects for Shinyanga revolve around
cotton farming and livestock. The government-owned cotton
ginneries have been privatized, but are still unprofitable
and in disrepair. The vast majority of cotton is exported
unprocessed at world prices, which have declined in recent
years. Despite a high number of livestock in the region,
there is no large-scale commercial ranching, no dairy
production, and no meat-processing plants. Desperate for
agricultural investment, Shinyanga will not likely be able
to compete with other regions for scarce foreign
investment.

--------------
Mbeya Region
--------------


9. (U) Mbeya region, in south-central Tanzania, is
relatively wealthy and agriculturally diverse, with a
climate ranging from cool highlands to moist tropical
forest. Unique in Tanzania, Mbeya gets rain year-round.
Because the Tanzania-Zambia highway runs through Mbeya, the
region also has good onward transport connections for
farmers seeking to get their coffee and tea crops to Dar es
Salaam markets, or to auction houses in Moshi and Mombassa.
Agriculture ranges from large tea and coffee estates, to
small rice fields and the ubiquitous banana trees.


10. (U) Possibly because of the reliable rains and good
roads, the average Mbeya resident seems a bit wealthier
than his counterparts elsewhere in the country. Mbeya's
wealth is still modest, measured in a brick houses with tin
roofs, instead of a mud and wattle houses with thatched
roofs. Mbeya's relative wealth is also visible in the
newer second hand clothes, high number of bicycles, and
wider variety of commercial goods available in the markets.


11. (SBU) Although in Dar es Salaam, politicians complain
that the benefits of privatization accrue mostly to
foreigners, particularly South Africans, a visit to
Wakulima Tea Estate showed one privatization success story
that benefits Tanzanians. The tea company, privatized in
2000, was formerly a parastatal industry and a perpetual
loss-maker. Now it is co-owned by a private entity, with
the cooperative Rungwe Smallholders Association owning a
25% equity. After privatization, production skyrocketed
from 500,000 kilograms to 3,338,743 kilograms of tea in
2004, with price, quality, and profits following suit. The
Tanzania smallholders were justifiably proud when they
showed Charge and EmbOff around the tea processing plant
and presented production figures. Operations were managed
by a white, Kenyan-born expatriate manager, showing the
degree to which larger companies in Tanzania economy still
depend on expatriate managers. (Embassy Self Help funded a
clinic for Wakulima's workers.)

--------------
Ruvuma Region
--------------


12. (U) Ruvuma region, in Tanzania's far Southwest, is one
of Tanzania's more isolated regions, and is closer
economically to neighboring Malawi and Mozambique than to
other parts of Tanzania. In his introductory remarks,
Regional Commissioner Retired Major General S.S. Kelembo
painted Ruvuma as a region with great, albeit unrealized,
agricultural and tourist potential. Indeed, the flight
over the region showed rich volcanic soil, and peaks of
completely forested mountain ridges, all tucked along Lake
Malawi. Although Ruvuma borders Lake Malawi, officials
said fishing is not a big industry, because the Tanzanian
part of Lake Malawi is too deep for easy fishing.


13. (U) Ruvuma has great potential, with 54,456 square
kilometers of arable land, much of it unoccupied. The
local government is organizing an Investments Forum to
inform investors about Ruvuma region. The Regional
Commissioner made a pitch to Charge to solicit US investors
in timber plantations, agricultural, and ranching.
Regional Commissioner also noted Ruvuma's mineral wealth,
largely unexploited, of gold, gemstones, coal, and
diamonds. However, limited road access hinders investment:
Ruvuma is 20 hours by road to Dar as Salaam. The Regional
Commissioner was grateful for a USAID infrastructure
program, now completed, that constructed 204 kilometers of
rural roads and 20 concrete bridges in the region.

--------------
Mtwara Region
--------------


14. (U) Mtwara region, in the far southeast, bordering on
Mozambique, was long one of the most isolated regions in
Tanzania. That Mtwara is now opening to the wider world is
only partly due to the fact that its Masasi district
happens to be home to President Mkapa. Certainly, the
newly-opened Mkapa bridge over the Rufiji river has done
much to ease Mtwara's isolation. Residents have high hopes
for the ongoing improvements to the coastal highway; they
anticipate that the new road will cut the drive time
between Dar es Salaam and Mtwara from the current fourteen
hours to five or six. The region's traditional window on
the world has been its ports, first, the shallow harbor in
historic Mikindani, which sheltered the centuries-old dhow
trade, later, the deep water port just down the coast in
Mtwara city. Mtawara's port, recently upgraded, is still
operating at only 30 percent capacity.


15. (U) The Mozambican border, delineated by the Ruvuma
River, has both eased and exacerbated Mtwara's isolation.
There is no bridge over the Ruvuma, nor is there any
immediate prospect that Mtwara will find $30 million to
fund a bridge project. Nonetheless, the predominant Makua,
Yao, and Makonde tribes all straddle the border, and petty
traders easily cross back and forth. Local government
officials know that they cannot sufficiently control the
trans-border traffic and worry that a criminal element from
Mozambique is entering to prey on Mtwara's population.
During Mozambique's long civil wars, insurgents often took
refuge on the Tanzanian side. Local officials in Mtwara
report that their predecessors let the region become a
neglected buffer zone. Acting Regional Commissioner Sadiki
referred to Mtwara as the "orphan region."


16. (SBU) Orphaned Mtwara may be, but it is not lacking in
resources. In the short term, food processing offers the
best prospects for investors. Mtwara is one of Tanzania's
top producers of cashew nuts. At present, most cashews are
produced by small-scale farmers and shipped raw to India
for processing. Local officials dream of reviving the
local cashew-processing industry, and capturing the
resulting value added and new jobs for Mtwara. On the
Masasi-Newala road, two shuttered cashew-processing
factories, former parastatals, are moldering away. One of
these factories was recently sold to a private investor;
Masasi District Commissioner Rufanga expressed the hope
that it would soon employ 200 workers. The other factory
is still awaiting a buyer. Neither looked ready to open
its doors soon. Regional officials also hope to develop a
deep sea fishing industry, but they worry that foreign
poachers will decimate fish stocks, since the region has no
capacity to patrol its waters. In the longer term, local
officials believe there are prospects for investment in
mining. The region is believed to hold deposits of garnet,
tourmaline and marble. While the infrastructure is barely
developed, tourists may be tempted to visit the beautiful
coastline, coral reef, and the historic district bordering
Mikindani harbor.


17. (SBU) Regional officials hope that cheap and reliable
electricity will also encourage new investment. To date,
Mtwara has had to generate its electricity by burning
imported diesel. Regional officials are very excited about
the Misimbizi gas pipeline project, a largely Canadian
investment that is due to come online soon, and which they
hope will provide abundant and reliable supplies of natural
gas to power the generators.


18. (SBU) Mtwara Region owes its much of its visibility to
President Mkapa. Several times a year, the President
visits his home village, which is now accessible via an
excellent dirt road. Mkapa's entourage typically fills up
the meager hotel offerings for miles around. Officials in
the regional and district governments report security is
tight, and they rarely see or interact with the president
or his entourage during these visits. They all stoutly
insist that the Mtwara region is well on the road to
development, and won't fall into isolation and neglect when
President Mkapa leaves office later this year.

OWEN